Return on Investment on Electronic Health Records

The following article is written by Ann O'Neill, director of clinical operations, Regent Surgical Health.

In my last column ("Electronic Health Records: What Does it Mean and Do We Have to Go There?") we discussed the inevitability of a CMS mandate for EHR systems within ambulatory surgery centers. Regardless of whether we implement such a system because of regulatory requirements or just because we want to improve efficiency, it makes good business sense to evaluate the financial and workflow impact of implementing an EHR system.

The first steps to success in an EHR implementation project are defining the project goals, and calculating the return on investment and a budget based on those goals. In the strictest sense: ROI = gain from investment – cost of investment) / cost of investment. There are many factors to consider when calculating the ROI of an EHR system, as it is not all financial. It is important to look at all the costs and benefits; the quantifiable (measured in dollars) as well as qualifiable (measured in units other than dollars) factors that will influence the EHR project and the ongoing post go-live support needs.

In the first table below, there are two lists of items to be measured when calculating the true outlay for an EHR project. Here, costs are the direct expenses incurred before, during, and post implementation. Returns are the items that could influence cost savings (gains).

Quantifiable

Costs	Returns
Labor
• Contracted or hired IT support hours, before, during, and post EHR implementation • Project Manager for the ASC side of the project (could be the ASC Administrator, DON, or a computer literate, organized, clinician who can hold people to task) • EHR Selection Committee members hours needed pre-implementation • EHR Implementation Team hours needed before, during, and immediate post implementation • Power-user training hours (using a train the trainer approach) • End-user training hours, including practice hours • Additional staffing required during first three weeks of go-live, giving extra time to adapt to new system • Weekly EHR maintenance hours post go-live	• Medical Record staff decrease in hours (usually at least one FTE can be eliminated) • Chart audit hours saved (nursing and medical record staff) • Report generation hours saved • Chart assembly hours saved • Staff training on manual documentation hours saved • Medical Coding staff decrease in hours (depends on configuration of EHR system) • Nursing worked hours saved on documentation • Front office hours saved on documentation during chart initialization • Staff hours saved from not having to do redundant documentation in multiple systems (i.e. paper medical record and business software)
Equipment
• EHR Servers (production, back-up) • End-user Laptops, PCs, or Tablets • Mobile computer carts • Computer monitors • Printers • Network hardware • Fax Server • Signature Pads • Cables (connecting to patient monitors, printers, etc)
Software
• Vendor EHR application software (software and license costs need to be calculated) • Operating Systems for user devices • Misc. Software (i.e. Adobe Acrobat, Excel, Oracle, etc.) • Interfaces (i.e. Patient Demographics, Surgery scheduling, Pathology. Consider bi-directional)
Services
• EHR Vendor Implementation Costs • EHR vendor annual service contract costs • EHR software update costs • IT support contract costs – specific to EHR system	• Elimination of dictation system
Processes
	• Paper medical record forms printing and binder costs savings • Faxing or mailing patient discharge summaries, operative reports, etc. to physicians eliminated with auto-faxing from EHR system • Coding costs saved (with optional EHR auto-coding- depends on EHR selection) • Medical records for return patients are auto-populated with historical information from previous visit – nursing and front office staff hours saved
Facility
• Server storage room; physical space, AC, power, fire suppression • Wiring and/or wireless network access points • Electrical outlets for hardware • Phone line(s)	• Costs for secure space and shelving for onsite medical record storage eliminated • Costs for long-term storage of medical records eliminated

In this next table, the deterrents' column is a list of factors that work against the success of an EHR project and the satisfiers' column is a list of factors that add to the value of an EHR system. Some of these items could be translated into actual dollars with some extrapolation.

Qualifiable

Deterrents

Satisfiers

• All staff need to learn a new system

• Competence and confidence in using such systems can take several weeks

• Need to dedicate resources to the project during implementation, pulling them away from patient care responsibilities

• ASC patient volume does not dramatically influence EHR fixed costs (servers, software, services, facility). Product pricing is generally not based on patient volume.

• Physician satisfaction with hours saved on documentation (i.e. elimination of dictation)

• Quickly individualized legibly printed discharge instructions for patients (regulatory)

• Ease of patient medication reconciliation (regulatory)

• Improved image of ASC; being computerized means being up to date in the image of providers and patients

• Days to completion and close of medical record decrease

• Days from medical record completion to coding decrease

• Days from medical record completion to billing decrease

• Employee satisfaction increase with gained efficiency in the workplace

• Electronic documentation at bedside gives patients perception of more nursing time spent with patient

• Immediate retrieval of medical record

• No lost medical records

• Ease of auditing medical records

• Can build in clinical decision support, giving guidance to staff as the system is used. (Helps ensure best practice and regulatory compliance.)

• Recruitment tool for younger nurses and physicians expecting this technology

Most of the items listed will apply to any ASC's EHR project. Others not listed may need to be considered. Taking the time to thoroughly examine the potential impact of such a project, culling out hard expenses, as well as measuring the influencing dynamics that might exist will aid in making the best informed decision for your organization.

With CMS breathing down the necks of acute care and clinical care providers to literally get on line with EHRs immediately, the ASC segment of the healthcare industry will soon be affected. Start your planning process now. Calculate the return on an EHR investment. Be prepared to budget for this vital capital improvement in the next two years.

Learn more about Regent Surgical Health.

More Articles Featuring Regent Surgical Health:

Physician Recruitment : Positioning a Surgery Center for Sustained Growth

New Regent Surgical Health, Swedish Covenant Hospital and Physician Joint-Venture Surgery Center in Chicago Breaks Ground

10 Years of Trials and Triumphs - Regent Surgical Health: Q&A With CEO Tom Mallon

Return on Investment on Electronic Health Records

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